The ‘Missing Link’ project has been completed, which improves the connection between the Port of Melbourne and the interstate freight network.

Federal Infrastructure and Transport Minister Anthony Albanese said the final stage to the project involved duplicating the dual-gauge track between Sims Street Junction and the Port, building 18 new turnouts, installing new signalling and completely reconstructing the Melbourne Operations Terminal.

As well as duplicating the line between the port and the interstate rail network, the ARTC has also built a new line between North Dynon and the port. Together these works represent a significant investment by both the Australian ($20 million) and Victorian ($13.3 million) governments as well as the ARTC ($6.5 million).

ARTC CEO David Marchant explained the Missing Link project has delivered one of the most significant improvements to the interstate rail network in many years.

“Over the past two years we’ve been undertaking a landmark infrastructure upgrade which will greatly improve the efficiency of freight movements into and out of the Port precinct,” said Mr Marchant.

“The new rail infrastructure will pave the way for a more flexible operating environment at South Dynon and increase yield, capacity, efficiency and reliability of the rail network.

“In simple terms it will allow more freight to be moved faster.”

The project was delivered by the ARTC and its partners South Improvement Alliance (SIA) consisting of John Holland Pty Ltd, MVM Pty Ltd and O’Donnell Griffin Pty Ltd.

The Australian and Victorian Governments are investing in projects to take trucks off local roads and connect the Port of Melbourne to major freight hubs using the existing rail network.

Expressions of interest will soon to be sought to deliver a series of rail freight ‘shuttle’ initiatives on the existing rail network by connecting the port to major freight hubs and businesses.

Federal Minister for Infrastructure and Transport Darren Chester said the proposal would take advantage of rail’s ability to shift larger volumes of freight than trucks, while also busting congestion in Victoria’s capital.

“The Australian Government’s free trade agreements are seeing a boom in exports, which has led to trucks taking more produce and freight to the ports. This project will provide the ability to shift larger volumes of freight via rail compared to trucks, and reduce congestion on our roads,” Mr Chester said.

“The freight and logistics industry had identified rail’s potential to reduce transport costs by about 10 per cent, with the proposal potentially improving Australia’s competitiveness, which is why the Australian Government is investing $8.4 billion in the Inland Rail project connecting Brisbane and Melbourne.”

Victorian Minister for Roads, Road Safety and Ports Luke Donnellan said the initiative will take trucks off local roads in Melbourne’s inner west.

“The Port of Melbourne will remain our primary freight hub for a generation. With container numbers expected to double over the next two decades we need to act now to share the load between road and rail.”

“Alongside the West Gate Tunnel, 24-hour truck bans in the inner west and the Port’s rail access plans, this project will help shift containers from residential streets onto dedicated routes to the port.”

The Australian Government has committed $38 million and the Victorian Government has committed $20 million to the initiative.

Funding will be available to upgrade rail connections and improve terminal access.

A project to get 3500 container trucks off the roads each day has been revived following a three-year freeze on the cash while the state government negotiated leasing the Port of Melbourne.

The port-rail shuttle project has had $58 million in federal and state money set aside for it since 2014, but the money has remained untouched.

Now with planning for the West Gate Tunnel in full swing – a project that will see an increase of up to 7000 trucks per day in some inner-western suburbs – the government is kick-starting the plan to transfer container freight from trucks to trains.

It also comes as new port owner the Lonsdale Consortium predicts the port could grow to handle between 12 and 15 million containers a year, up from 2.6 million.

The government will soon seek expressions of interest to deliver a series of rail freight "shuttles" that will move large shipping containers between the port and freight rail terminals located around the city.

The port-rail shuttle would see 3500 container trucks replaced with 28 freight trains that would transfer 1.4 million containers a year, an analysis by consulting firm GHD found.

It will use existing rail lines to the Port of Melbourne docks to transfer container freight between hubs in Altona, Somerton and Lyndhurst and the port, where a terminal would be built.

Victorian Minister for Roads and Ports Luke Donnellan​ said container numbers were expected to double over the next two decades, and funding would be available to upgrade rail connections and improve terminal access.

Federal Minister for Infrastructure and Transport Darren Chester said the freight and logistics industries predict rail access will reduce transport costs by about 10 per cent.

"The Australian government's free trade agreements are seeing a boom in exports, which has led to trucks taking more produce and freight to the ports. This project will provide the ability to shift larger volumes of freight via rail compared to trucks, and reduce congestion on our roads," Mr Chester said.

Nearly 90 per cent of imports are currently being transferred to metropolitan areas via trucks, said Rail Futures Institute secretary Dr Bill Russell.

"The current system of moving around containers in Melbourne is very inefficient … the operators of suburban terminals are keen for the project to happen and have been looking for government facilitation, and possibly government money," he said.

Melbourne has the busiest port in Australia, handling more more than 2.6 million TEUs (20-foot equivalent units) annually, with Sydney's throughput more than 2.3 million TEUs in 2015-16.

But there are warnings that Sydney could soon overtake Melbourne. Container operator Qube Logistics abandoned projects in Melbourne due to the lack of rail connections. The company is focusing instead on the $1.5 billion Moorebank intermodal terminal development in Sydney.

The Port of Melbourne's new owners are required to come up with a rail strategy under the terms of their lease, but insiders suggested the state government is going ahead with releasing expressions of interest under pressure from the federal government to spend the money.

In 2015, a federal government spokesperson threatened to spend their $38 million contribution on "other productivity-enhancing projects in Victoria", as the project remained idle.

Shadow Victorian ports minister David Hodgett​ said reliance on trucks was "inefficient and costly" and blamed the government for taking so long to commit to the project.

"You would have to question now, is this just a PR exercise Daniel Andrews is going through to appease inner-city seats where Labor is under attack by the Greens?" he said.

Greens Western Metropolitan MP Colleen Hartland said residents in the west were fed up with the high volume of trucks moving through their suburbs, which was causing worrying levels of child hospital admissions due to respiratory issues.

The Public Transport Users Association welcomes the Andrews Government’s resolution on Sunday to progress work on the Port Rail Shuttle to “level the playing field” between road and rail freight for the Port of Melbourne.

PTUA President Dr Tony Morton said the Port Rail Shuttle was a critical project for the mutual benefit of freight operators and residents in Melbourne’s west.

“The relatively modest $58 million price tag belies the importance of this project,” Dr Morton said. “It’s all about renewing a heap of underutilised rail infrastructure around the port area and inner west, based on the most up-to-date thinking in efficient freight movement and logistics. It’s also to Melbourne’s competitive advantage as we catch up to where Sydney is now with its Moorebank multimodal terminal.”

The lack of rail connections to the Port of Melbourne led operator Qube Logistics to abandon the port and focus its operations in Sydney, where the Moorebank terminal provides full flexibility in road and rail-based container logistics. In Melbourne, the Port Rail Shuttle will allow direct rail access between the port and multimodal terminals (dubbed ‘inland ports’) in Altona, Somerton and Lyndhurst.

Rail connections to more far-flung destinations will also be better provided for. “Right now we have the absurd situation where bulk freight is railed in from regional Victoria – at a great saving of money, energy and emissions – but then has to be reloaded onto trucks for the last five kilometres into the dock area,” said Dr Morton.

At the same time, the shuttle needed to be placed in context as the start of a wider rail strategy for the Port, according to the PTUA. “We need to be serious about rail if the port is going to handle the freight volumes being talked about: this means reconnecting rail to Webb Dock, and looking at the whole access charging regime to level the playing field with almost ‘free’ road transport.”

The PTUA also stresses the wider context for transport planning in western Melbourne, with hearings currently underway on the Environment Effects Statement for Transurban’s West Gate Tunnel. “The Port Rail Shuttle currently tops our list of high-value projects that are competing directly with the West Gate Tunnel for attention and funding,” Dr Morton said. “It hasn’t escaped anyone’s attention that the rail shuttle was put on hold for three years just as major road plans were being progressed.”

“We’re under no illusions here – there is a direct competitive situation between road and rail for port freight traffic,” said Dr Morton. “And now we have a choice before us. The West Gate Tunnel tilts the balance toward vastly greater numbers of trucks, while the Shuttle and its complementary rail measures are intended to reduce truck movements. Clearly, the Shuttle affects the business case for the road and vice versa. If we were being honest in planning for the public interest and keeping to the fine words of the Transport Integration Act, the road and rail alternatives would be evaluated side-by-side.”

“This is quite separate to the threat the West Gate Tunnel poses to city traffic and amenity more generally,” Dr Morton said. “Though we’re talking about freight at present, this is not going to be primarily a ‘freight road’. It is quite plainly a radial commuter motorway for single-occupant cars into central Melbourne, of the sort that we thought transport planners had abandoned after the 1970s.”

Submissions on the West Gate Tunnel EES by PTUA as well as the City of Melbourne, the Planning Institute of Australia and the Inner Melbourne Planning Association have raised concerns that freight on the new road will be overwhelmed by an explosion in private commuter traffic, to the detriment of local communities, and that sustainable public transport solutions were being overlooked in the rush to endorse a private toll road. This contrasts with the more targeted ‘West Gate Distributor’ proposal the ALP took to the 2014 State election.